Jim Cramer says look to buy these 5 stocks outside the AI trade for diversification

On Tuesday, CNBC's Jim Cramer shared insights with investors about several undervalued stocks he believes could thrive as the artificial intelligence sector cools off. During his segment, the host of "Mad Money" warned that as momentum in technology stocks wanes, investors may regret missing out on these alternative options. Cramer's remarks followed a keynote address by Nvidia's CEO Jensen Huang at Computex, which sparked renewed interest in data center and AI stocks. However, he expressed concerns over signs of weakness in certain software firms, compounded by an impending influx of stock from major players like Alphabet and anticipated mega IPOs from companies such as SpaceX, Anthropic, and OpenAI. "Tech seems full of vulnerabilities ... I want to find an antidote in some other sectors where growth stocks in non-growth sectors are being thrown away," Cramer noted. Among the stocks Cramer suggested, JPMorgan Chase stood out as a potential buy. He pointed out that financial stocks, particularly JPMorgan, have struggled this year, with the sector ranking as the worst performer in the S&P 500. Currently trading at about 13 times forward earnings—down from 15 at the year's start—Cramer emphasized, "You normally don't get to buy this stock so cheap, and no one would regard it as a lousy franchise, even as the stock's down 7% year-to-date." Cramer also turned his attention to the healthcare sector, which has faced significant headwinds this year. He expressed optimism about Eli Lilly but highlighted Johnson & Johnson as a potentially more attractive investment, thanks to its robust drug pipeline and expanding medical technology operations. "Buy this one slowly because, like the banks, there's very little support for the stock here," he advised, acknowledging the uncertainty surrounding market rotations. In addition, Cramer pointed to consumer staples giant Kimberly-Clark, praising its portfolio of household brands and appealing dividend yield, especially in light of its merger with Kenvue, the parent company of Tylenol and Band-Aid. He also identified opportunities in the restaurant sector, recommending both McDonald's and Yum! Brands, stating, "The love affair with tech has taken this stock down to well below where it should be." Lastly, Cramer mentioned Kraft Heinz, expressing confidence in CEO Steve Cahillane's turnaround strategy, which could stabilize the stock's nearly 7% dividend yield. He concluded with a cautious outlook for the tech sector, highlighting the potential need for $500 billion in funding for data center developments, which could pressure tech stocks further. He reiterated the importance of considering non-tech investments like those he mentioned. In light of these insights, Cramer encourages investors to diversify their portfolios with stocks outside the tech realm as the market landscape evolves.